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As your Chicagoland real estate agent Michael LaFido, I want to be your resource for all things real estate. Whether you are buying, selling, or investing in real estate, I am here to guide you through the process. Subscribe to this blog to learn all of the latest news from our local market and receive expert tips for buying or selling a home.

Where's the Chicagoland Market Heading in 2015?

It's hard to believe, but yet another year has flown by here in the Chicagoland area. Today, we thought we would take a look back at what we saw in real estate in 2014, and what it means moving forward.

Over the last 12 months, home prices in Illinois appreciated by 3.6%. Since the peak of the market in 2007, home prices are down 19.9%. During the bubble, in the 2003 to 2007 range, we saw a national appreciation rate of 7% annually. During the bust, we saw homes depreciate at a rate of 5.1%, before making a strong recovery. Currently, the national average for annual appreciation is back to a steady 5.9%! Illinois's recovery has been a bit slower, but we are certainly getting closer to pre-recession levels.

Over the next three to four years, appreciation is projected to occur at about 3.2% annually. Of course, appreciation occurs at very different rates depending on the price bracket. For example, homes under $100,000 depreciated by 6% in 2014, whereas homes in the $1 million+ range appreciated by 16.2% nationwide! In Illinois, we're seeing somewhat similar trends, but our luxury homes haven't been appreciating anywhere near as fast as the national average.

There is some good news: interest rates are still low. Why does that matter? Well, the higher the rate, the fewer the potential buyers - higher rates mean higher monthly payments, which directly affect debt-to-income ratios. The National Association of Realtors, The Mortgage Brokers Association, Fannie Mae, and Freddie Mac are all expecting interest rates to increase anywhere from a quarter of a point to an entire point over the next year. That's not a huge rise, but it could cost you thousands of dollars over the life of a loan, so it's something to keep an eye on.

What does all of this mean for you? If you're looking to buy or sell, NOW is the time. Conditions are pretty stable right now, but we're not expecting that to last throughout the year. If you have questions about conditions in your specific area, or would like to discuss your options, don't hesitate to give me a call or shoot me an email. I would love to hear from you!